Historically, the financial sector has been a leading sector or first to move while the energy sector has been a lagging sector or last to move - both in up trends and down trends. The financial sector index topped out in late January.

We are coming into the last week of real trading in the year with Fedspeak dominating the tone. We are coming off a very profitable week in trading. This crucial weekend video newsletter update details which trades you may want to take this week.

Regional banks are in disaster mode. The KBW regional bank index fell 2.7% on Thursday which pushed it below the October low. It is at $49.45, while the October 24 low was $50.82. Peak to trough, the KBW index fell 28% in 2015-2016.

While the bull market could very well still last until Q2 2019, the long term risk/reward no longer favors bulls. Past a certain point, risk/reward is more important than the stock market’s most probable direction.